Adani Group incorporates data centre subsidiary in Mumbai

The Adani group has incorporated a new data centre subsidiary in Mumbai as it looks to build a network of hyperscale data centres in India.

The subsidiary, Mumbai Data Center Ltd., was established by AdaniConnex Pvt. Ltd., a joint venture of the company with EdgeConnex Europe BV, according to an exchange filing.

This comes days after finance minister Nirmala Sitharaman accorded infrastructure status to data centres in the Union Budget 2022.

The ports-to-energy conglomerate says the new entity will develop, operate, maintain, deal with data centres, Information Technology (IT), IT-enabled services, Cloud and undertake activities associated with its infrastructure development including land acquisition for the said purpose.

Market intelligence firm International Data Corporation defines a data centre as “hyperscale” when it exceeds 5,000 servers and 10,000 square feet. Some hyperscale data centres can host even millions of servers.

The billionaire Gautam Adani-led group had forayed into the data centre business last year by forming a JV with US-based EdgeConneX. The company is eyeing hyperscale data centres in six Indian cities -- Chennai, Navi Mumbai, Noida-Delhi, Vizag, and Hyderabad.

In India, the demand for hyperscale data centres has shot up in the past few years as more businesses are moving their IT infrastructure to the cloud, especially driven by increasing demand for app-based services and OTT platforms. The Covid-19 pandemic has further accelerated the shift to the digital medium, benefitting the data centre industry.

According to India Ratings and Research (Ind-Ra), the country’s data centre industry will attract investment plans of ₹70,000 crore to ₹72,000 crore over the next five to 10 years. “These ambitious investments will mainly be driven by new, large corporate groups (around 40%) and cloud service providers (around 30%).”

The demand outlook for new data centre capacities is also strong, backed by the rising data usage by retail customers (both on wireless and wireline segment), a robust outlook for enterprise users, and the emergence of cloud service providers (CSPs), the report said.

Regulatory actions have been favourable with few structural steps such as the government’s Digital India initiatives, the draft data localisation bill and infrastructure status, it said.

In November last year, Adani Group had committed to invest $70 billion by 2030 to become the world’s largest renewable energy producer.

The company plans to use this green energy to run its data centres.

“It is inevitable that massive data centre infrastructure will become the largest energy-consuming industry to ever exist,” Gautam Adani, Asia’s second-richest person, had said at the Bloomberg India Economic Forum in November 2021.

At a recent JP Morgan India Investor Summit, Adani pledged the group would help India exceed its emission intensity reduction goal, citing that its renewable pipeline had touched 25 gigawatts (GW) four years ahead of the 2025 target.

With all these initiatives, the Adani group said it expects to become the greenest choice to warehouse not just India’s but perhaps much of the world’s data.